To the basic elements of the information engineering approach, we add the notion of information chains. The information-chain concept parallels that of the value chain. In fact, for every component of the value chain, at least one information chain exists to support it. Such a chain may begin with a marketing forecast. The forecast leads to a sales plan, from which managers develop a production plan, and thence to a series of decisions about purchases, labor force commitments, and finally a series of sales results. The sales results are eventually quantified as ACTUALS in a sales report, and senior managers can assess the validity of the original marketing forecast in light of these actual results. (Boland, 2000) Unfortunately, most information systems cannot support the association of specific plans and observed results. That is, they cannot close the information chain. Although these systems are excellent at processing transactions, they lack the capability to trace the flow of events, materials, information, and the decisions managers make about them. <\/p>\n

The transaction processing focus is an intrinsic limitation, but it isn\u2019t the only one. Another limitation is the overwhelming emphasis most organizations place on financial results. When organizations stress financially oriented performance measures, they tend to obscure or confuse the tracking of more fundamental causes of performance successes or failures. (Van de Ven, 2005 p. 1377-1404) New accounting methods like activity-based costing are an improvement, but still stress financial measures. Creating customer value is a tough proposition without a focus on traceability. <\/p>\n

Traceability of causes <\/u><\/h3>\n

Traceability of cause and effect is a basic requirement in the transition to competing based on value-chain logic. Traceability is important in solving problems of delivering goods to customers on time, because this performance measure is fundamental to perceived value in the marketplace. In this area, most information systems can provide a quantification of service levels but few provide the mechanisms to determine why specific measurements were observed. <\/p>\n

For example, many steel service centers have informative systems that can accurately report how many days it took to deliver a quantity of steel to a customer, but few such systems provide management insight on why some deliveries were late. (Tsoukas, 2002 p. 567-582) <\/p>\n

The value-chain architecture <\/u><\/h3>\n

The key benefit of value-chain logic is that it clarifies the relationship of internal operations to events visible to the company\u2019s customers and critical stakeholders. Information engineering, with a few methodological improvements, can help clarify the corresponding information relationships through which the company creates those events. For example, the function-entity matrices that contrast business function against data can be useful in finding point of sensitivity and leverage in performance. (Romme, 2003 p. 558-573)<\/p>\n

Conclusion <\/h3>\n

In the past, outsourcers tended to look just like enterprise IT departments, handling large numbers of diverse devices, systems and applications. By contrast, the new model is based on the idea that different players in the market will focus very narrowly on a limited set of competencies (e.g., managing data centers, servers, a particular application, or a specific business process). Since, for example, the competencies needed to succeed at operating server farms are different from those needed to provide a specific application service, the rules of competitive engagement will change: Companies that try to provide totally integrated outsourcing are likely to fail against competitors that are themselves highly focused, and have a series of inter-dependent partnerships. <\/p>\n

This major restructuring of the IT value chain introduces its own forms of complexity and the need for something akin to integrated, end-to-end multi-vendor management. It will also create the need for a new type of industry player, a service integrator. Early leaders in this new role are International Network Services (INS\u2013www.ins.com) and AT&T Solutions (www.att.com\/solutions). (Romme, 2003 p. 558-573) The ability to address a much wider range of concepts and the quality of those insights are much higher. Now the team can plan learning in relation to time, which dramatically portrays opportunities\u2019 lifecycle cost. The depth of analysis is greater. There is also tremendous learning potential through scenario analyses, which are embedded in the new tools. The effect is a more representative project profile.<\/p>\n

While the development of unconventional resources is a complex value chain, the new tools and processes Shell unconventional oil has implemented are applicable to conventional opportunities where there is a portfolio of projects to be managed. In these instances, the same tools and processes outlined here enable a portfolio of multiple wells to be more effectively managed at a higher aggregation level. If a portfolio contains multiple individual projects with dependencies and common resources (constraints), it is a candidate for more effective modeling using the dynamic business-simulation planning processes.<\/p>\n

References<\/h3>\n

Boland, R., F. Coilopy. 2004. Managing as Designing. Stanford University Press, Stanford, CA.<\/p>\n

Huff S.L., Maher P.M., and Munro M.C., \u201cWhat Boards Don\u2019t Do-But Must Do-About Information Technology,\u201d Ivey Business Journal<\/em>, 69\/1 (September\/October 2004): 1-4.<\/p>\n

Porter Michael, Competitive Advantage: Creating and Sustaining Superior Performance (New York: Free Press, 1985).<\/p>\n

Porter M.E. and Millar V.E., \u201cHow Information Gives You Competitive Advantage,\u201d Harvard Business Review<\/em>, 63\/4 (July\/August 1985): 149-160.<\/p>\n

Romme, G. 2003. Making a difference: Organization as design. Organ. Sei. 14(5) 558-573.<\/p>\n

Tsoukas, H., R. Chia. 2002. On organizational becoming: Rethinking organizational change. Organ. Sei. 13 567-582.<\/p>\n

Van de Ven, A. H., M. S. Poole. 2005. Alternative approaches for studying organizational change. Organ. Stud. 26(9) 1377-1404.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

RUNNNING HEAD: PORTER\u2019S VALUE CHAIN ANALYSIS Porter\u2019s Value Chain and Information System [Name of the Writer] [Name of the Institution] Porter\u2019s Value Chain and Information System Introduction The person most accredited for mounting and articulating the value chain thought is Michael Porter in his 1985 book, Competitive advantage. He offers viewing a firm as a sequential procedure of value-creating actions as a means of a […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[147],"tags":[6493],"class_list":["post-6493","post","type-post","status-publish","format-standard","hentry","category-information-technology","tag-porters-value-chain"],"_links":{"self":[{"href":"https:\/\/glowriters.com\/wp-json\/wp\/v2\/posts\/6493"}],"collection":[{"href":"https:\/\/glowriters.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/glowriters.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/glowriters.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/glowriters.com\/wp-json\/wp\/v2\/comments?post=6493"}],"version-history":[{"count":0,"href":"https:\/\/glowriters.com\/wp-json\/wp\/v2\/posts\/6493\/revisions"}],"wp:attachment":[{"href":"https:\/\/glowriters.com\/wp-json\/wp\/v2\/media?parent=6493"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/glowriters.com\/wp-json\/wp\/v2\/categories?post=6493"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/glowriters.com\/wp-json\/wp\/v2\/tags?post=6493"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}